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A dollar spent is a dollar taxed
Posted on 26 October 2009 7:31am
By Steve Pratt
Alaska Standard Contributor
The U.S. federal budget deficit for the fiscal year ending
on September 30 was $1.4 Trillion. That’s an additional
future tax burden of $20,000 for each family of four. This
is the largest deficit relative to the size of the economy
since 1945. The expectation for the current fiscal year,
and several years into the future, is more of the same.
For some, as long as “someone else pays for it”, increased
public spending is a non-issue. At the federal level, what I
call “Deficit Recognition Fatigue” seems to have set in.
The numbers are so incomprehensible, and we are so
convinced that “the rich will pay for it”, that many of us
just ignore it. As a corollary at the local level, ballot
proposition advocates often note that taxpayers will only
have to pay 20-30% of the cost since “the state will pay
the remainder.” Therefore, the logic goes, turning down a bond not only deprives us of
fulfilling a local need or want, but is also bad for the local economy.
This is nonsense. Every dollar government spends is the result of a direct or indirect tax on
someone. If the state spends a dollar on item A, it has to obtain that dollar from
somewhere and decide not to spend that dollar on item B. Economist Milton Friedman User login
popularized The Free Lunch Theorem: There is no such thing as a free lunch! We may
collectively be better off after the dollar is spent, but it needs to come from someone, Username or e-mail: * Password: *
either directly or indirectly, nonetheless.
Most of us are willing to pay taxes to provide educational opportunities (ASD is spending
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over $17,000 per student this year so there is little doubt the community considers fully
funding excellent education a priority), ensure public safety, and provide a basic core of Log in
amenities that reflect our values. However, our elected decision-makers need to always Create new account
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keep in mind that each dollar they commit comes from someone. Wise stewardship,
accountability and transparency lead to public trust and support. The converse is also true. Sign in using Facebook
Perhaps a bit more reflection would occur if each spending proposal carried this preamble:
“A Dollar Spent Is A Dollar Taxed” EMAIL LIST
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